The Web Began Dying in 2014 – Here’s How

Yves here. 2014 was the year Google launched a change in its search algorithm called Panda. It treated sites that did aggregation (even if only as part of its content, as in our daily Links feature) as junk site scrapers and downgraded them in a big way in search rankings. Needless to say, sites that do aggregation well compete with Google’s search function, which was crapified by then, and in our case, Google News. Our total traffic fell by 1/3.

Note in the third chart how much traffic major media sites get from Google and Facebook combined. By contrast, Naked Capitalism gets <15% of its traffic from both sources. While this guarantees our independence, it costs us greatly in terms of revenues and influence. By André Staltz, who works as an independent contractor, programming instructor, speaker, and donation-based open source developer. From 2013 to 2017 he worked as a Senior Web and Mobile Developer at Futurice. Prior to that, he worked on his own startup building web discussion forum software. Originally published at saltz.com

It may seem as though nothing has changed on the web – but since 2014, Google and Facebook hace acquired direct influence over more than 70% of internet traffic. They’re not stopping there.

Before the year 2014, there were many people using Google, Facebook, and Amazon. Today, there are still many people using services from those three tech giants (respectively, Google (GOOG), Facebook (FB), Amazon (AMZN)). Not much has changed, and quite literally the user interface and features on those sites has remained mostly untouched. However, the underlying dynamics of power on the web have drastically changed, and those three companies are at the center of a fundamental transformation of the web.

It looks like nothing changed since 2014, but GOOG and FB now have direct influence over 70%+ of internet traffic.

Internet activity itself hasn’t slowed down. It maintains a steady growth, both in the amount of users and amount of websites:

(Sources: https://news.netcraft.com/archives/category/web-server-survey and http://www.internetlivestats.com/internet-users/)

What has changed over the last 4 years is market share of traffic on the web. It looks like nothing has changed, but GOOG and FB now have direct influence over 70%+ of internet traffic. Mobile internet traffic is now the majority of traffic worldwide and, in Latin America alone, GOOG and FB services had 60% of mobile traffic in 2015, growing to 70% by the end of 2016. The remaining 30% of traffic is shared among all other mobile apps and websites. Mobile devices are primarily used for accessing GOOG and FB networks.

(Source: https://www.sandvine.com/resources/global-internet-phenomena/2016/north-america-and-latin-america.html)

The press, unlike before, depends on GOOG-FB to stay in business.

Another demonstration of GOOG and FB dominance can be seen among media websites. The most popular web properties that don’t belong to GOOG nor FB are usually from the press. For instance, in the USA there are 6 media sites in the top 10 websites; in Brazil there are 6 media sites in the top 10; in UK it is 5 out 10.

From where do media sites get their traffic? Prior to 2014, Search Engine Optimization (SEO) was a common practice among web developers to improve their site for Google searches, since it accounted for approximately 35% of traffic, while more than 50% of traffic came from various other places on the Web. SEO was important, while Facebook presence was nice-to-have. Over the next 3 years, traffic from Facebook grew to be approximately 45%, surpassing the status that search traffic had. In 2017, the media depends on both Google and Facebook for page views, since it’s the majority of their traffic.

(Source: https://blog.parse.ly/post/2855/facebook-continues-to-beat-google-in-sending-traffic-to-top-publishers/)

The relationship between media sites and the two tech giants is difficult. In 2014, FB built Facebook Paper as an attempt to have a larger control over news consumption. Their tactic failed, but their strategy persisted through different means such as Facebook Instant Articles. The media, being dependent on social traffic and threatened by the social behemoth, reacted. They pulled out support for Instant Articles.

Meanwhile, GOOG notices how its search traffic hadn’t improved, while Facebook had picked up steam, so GOOG launches their Instant Articles alternative called Accelerated Mobile Pages (AMP) and proactively starts serving articles from GOOG servers instead of directing traffic to media sites. The press reacts similarly to how they did for FB: reported bold stories about the search behemoth’s thirst for control over news consumption.

GOOG and FB ceased competing directly, focusing on what they do best instead.

Data shows FB has dramatically improved its dominance on the web, while Google search hasn’t significantly changed. How exactly did FB achieve that, and what events were key to that development? Prior to 2014, both companies had a portfolio of multiple web services. GOOG hadn’t yet become Alphabet, so its focus was diffused. GOOG was trying to enter the social market, first with Google Wave, then Google Buzz, Orkut, and Google+. In total, GOOG has acquired 18 companies from the social media category, of which only 1 acquisition happened post-2014, while 5 of those happened in 2010 alone. FB was competing in the search market, through Bing, in partnership with Microsoft (MSFT).

During 2014, FB apparently reorganized itself to focus on social only. In February, it bought WhatsApp, for 11 times the price GOOG bought YouTube. In December, it canceled its Bing partnership with MSFT. User retention on Facebook.com grew steadily (see chart below). Through its four simple products, Facebook, WhatsApp, Messenger, and Instagram, FB had become the social superpower.

(Sources: https://www.statista.com/statistics/346167/facebook-global-dau/ and https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/)

Similarly, GOOG in 2014 started reorganizing itself to focus on artificial intelligence only. In January 2014, GOOG bought DeepMind, and in September they shut down Orkut (one of their few social products which had momentary success in some countries) forever. The Alphabet Inc restructuring was announced in August 2015 but it likely took many months of meetings and bureaucracy. The restructuring was important to focus the web-oriented departments at GOOG towards a simple mission. GOOG sees no future in the simple search market, and announces to be migrating “From Search to Suggest” (in Eric Schmidt’s own words) and being an “AI first company” (in Sundar Pichai’s own words). GOOG is currently slightly behind FB in terms of how fast it is growing its dominance of the web, but due to their technical expertise, vast budget, influence and vision, in the longrun its AI assets will play a massive role on the internet. They know what they are doing.

These are no longer the same companies as 4 years ago. GOOG is no longer an internet company, it’s the knowledge internet company. FB is not an internet company, it’s the social internet company. They used to attempt to compete, and this competition kept the internet market diverse. Today, however, they seem mostly satisfied with their orthogonal dominance of parts of the web, and we are losing diversity of choices. Which leads us to another part of the internet: e-commerce and AMZN.

AMZN does not focus on making profit.

(Source: https://www.statista.com/chart/4298/amazons-long-term-growth/)

Instead, its mission is to seek market leadership, crushing competitors in the USA.

I could elaborate on how AMZN is the e-commerce company, but I would be just repeating Scott Galloway’s exposure of this topic. It’s worth watching his talks.

What the Web Was and What It Became

The events and data above describe how three internet companies have acquired massive influence on the web, but why does that imply the beginning of the web’s death? To answer that, we need to reflect on what the web is.

The original vision for the web according to its creator, Tim Berners-Lee, was a space with multilateral publishing and consumption of information. It was a peer-to-peer vision with no dependency on a single party. Tim himself claims the web is dying: the web he wanted and the web he got are no longer the same.

Doesn’t GOOG defend in the open web?

GOOG, as a company born from the web, has helped take it forward both technologically and in adoption. That is undeniable. They still lead efforts to improve the open web, such as advocacy of Progressive Web Apps (PWAs) over native mobile apps.

Isn’t GOOG trying to guarantee the open web stays alive? Not necessarily. GOOG’s goal is to gather as much rich data as possible, and build AI. Their mission is to have an AI provide timely and personalized information to us, not specifically to have websites provide information. Any GOOG concerted efforts are aligned to the AI mission.

Mobile usage is on the rise – having already crossed desktop as the primary channel for internet usage – and native mobile apps are so far the best way of providing good user experience on mobile. GOOG collects little or no data from native mobile apps, to some extent on Android, but specially on iOS. PWAs happen to live in the neutral and open web, and are better suited for data collection while providing great user experience on mobile.

 

GOOG promotes lock-in and proprietary technologies such as Firebase and Google-dependent AMP installations as much as it advocates open PWAs. GOOG does not consistently defend the open web. They dropped XMPP in Gtalk, and Gtalk itself was deprecated, favoring Google Hangouts with a proprietary protocol. Chrome Web Store is a walled garden like App Store. They shutdown Google Reader based on RSS, an open standard. Google Cloud TPU is proprietary hardware that only exists in their datacenters, supporting their open source framework TensorFlow. Google Inbox suffers “proprietary creep”: non-standard, closed algorithms that promise to organize your life, an essential component of a lock-in based business model.

GOOG is a huge company where employees have autonomy and multiple projects and efforts are occurring. Big efforts, though, are coherent, concerted, and well aligned with its mission: to be an AI-first company, an AI that is closed and lives in their cloud.

From the 90s until the 2010s, the web we have experienced has been, albeit somewhat imperfectly, faithful to its original purpose. The web’s diversity has granted space for multiple businesses to innovate and thrive, independent hobbyist communities to grow, and personal sites to be hosted on whatever physical servers can host them. The internet’s infrastructural diversity is directly tied to the success of diverse Web businesses and communities. The web’s openness is vital for its security, accessibility, innovation and competitiveness.

After 2014, we started losing the benefits of the internet’s infrastructural and economical diversity. It is difficult to compete with AMZN’s and GOOG’s cloud services, which host a massive amount of sites for other businesses. Any website aspiring towards significant traffic depends on search and social traffic.

What the Web Will Become Under GOOG-FB-AMZN

The following analysis is an extrapolation for the future, based on the current state of the web and strategies made public by executives at GOOG-FB-AMZN.

The War for Net Neutrality in the USA won a battle in 2014, but in 2017 we are seeing a second battle which is more likely to be lost. Internet Service Providers (ISPs) are probably soon going to dictate what traffic can or cannot arrive at people’s end devices. GOOG-FB-AMZN traffic would be the most common, due to their popularity among internet users. Because of this market demand, ISPs will likely provide cheap plans with access to GOOG-FB-AMZN, while offering more expensive plans with full internet access. It is already a reality in Portugal. This would grow even more the dominance the three tech giants already enjoy. There would be no more economic incentive for smaller businesses to have independent websites, and a gradual migration towards Facebook Pages would make more sense. Smaller e-commerce sites would be bought by AMZN or go bankrupt. Because most internet users couldn’t open all the sites, GOOG would have little incentive to be a mere bridge between people and sites.

GOOG’s shift away from search is a sign how they are growing their strategy beyond the web. For many years, Google was just a tool that played the important role of assisting the web, by indexing it. Lately, however, it is not attractive for Google to be a mere search engine of the web. For the purposes expressed in their mission statement, “to organize the world’s information and make it universally accessible and useful”, the search engine approach has been exhausted. The multi-second path from search query, to search results, to webpage, to information, is too long to provide an ideal user experience. Their goal is to cut the middlemen in that path. They have tried to cut out the results page with their “I’m feeling lucky” button, but without intelligent analysis they cannot reliably take shortcuts in that path. With AI, they believe they can shorten the path to just one step, “get information”, even without searching for it in the first place. That’s the purpose of Suggest.

As an index, people have different expectations on search result neutrality. Some want Google Search to be entirely neutral, some demand immediate action to remove some results. The European Union has both demanded GOOG to comply with removal requests, and fined GOOG for not being neutral in shopping queries. It is not beneficial for GOOG to assume the role of an impartial arbiter of content, since it’s not supporting their business model. Quite the contrary, they are under public scrutiny from multiple governments, potentially risking their reputation.

The Suggest strategy is being currently deployed through Google Now, Google Assistant, Android notifications, and Google Home. None of these mentioned technologies are part of web, in other words, not part of “browser-land” made of websites. The internet is just the underlying transport layer for data from their cloud to end-user devices, but the web itself is being bypassed. Schmidt’s vision for the future is one where internet services are ubiquitous and personalized, as opposed to an experience contained in web browsers in desktop machines.

Similarly, while AMZN’s business still relies on traffic to their desktop web portal (accounting for 33% of sales), a large portion (25%) of their sales happen through mobile apps, not to mention Amazon Echo. Like Google Home, Amazon Echo bypasses the web and uses the internet just for communication between cloud and end user. In these new non-web contexts, tech giants have more authority over data traffic. They can even directly block each other, like GOOG recently cut support for YouTube traffic in Amazon Echo devices.

The Appleification of Tech Giants

GOOG, MSFT, FB, and AMZN are mimicking (Apple) AAPL’s strategy of building brand loyalty around high-end devices. Through a process I call “Appleification”, they are (1) setting up walled gardens, (2) becoming hardware companies, and (3) marketing the design while designing for the market. It is a threat to AAPL itself, because they are behind the other giants when it comes to big data collection and its uses. While AAPL’s early and bold introduction of an App Store shook the web as the dominant software distribution platform, it wasn’t enough to replace it. The next wave of walled gardens might look different: less noticeable, but nonetheless disruptive to the web.

There is a tendency at GOOG-FB-AMZN to bypass the web, which is motivated by user experience and efficient communication, not by an agenda to avoid browsers. In the knowledge internet and the commerce internet, being efficient to provide what users want is the goal. In the social internet, the goal is to provide an efficient channel for communication between people. This explains FB’s 10-year strategy with Augmented Reality (AR) and Virtual Reality (VR) as the next medium for social interactions through the internet. This strategy would also bypass the Web, proving how more natural social AR would be than social real-time texting in browsers. Already today, most people on the internet communicate with other people via a mobile app, not via a browser.

The common pattern among these three internet giants is to grow beyond browsers, creating new virtual contexts where data is created and shared. The web may die like most other technologies do: simply by becoming less attractive than newer technologies. And like most obsolete technologies, they don’t suddenly disappear, neither do they disappear completely. You can still buy a Walkman and listen to a tape with it, but the technology has nevertheless lost its collective relevance. The web’s death will come as a gradual decay of its necessity, not as a dramatic loss.

The Trinet

The internet will survive longer than the web will. GOOG-FB-AMZN will still depend on submarine internet cables (the “Backbone”), because it is a technical success. That said, many aspects of the internet will lose their relevance, and the underlying infrastructure could be optimized only for GOOG traffic, FB traffic, and AMZN traffic. It wouldn’t conceptually be anymore a “network of networks”, but just a “network of three networks”, the Trinet, if you will. The concept of a workplace network which gave birth to the internet infrastructure would migrate to a more abstract level: Facebook Groups, Google Hangouts, G Suite, and other competing services which can be acquired by a tech giant.

Workplace networks are already today emulated in software as a service, not as traditional Local Area Networks. To improve user experience, the Trinet would be a technical evolution of the internet. These efforts are already happening today, at GOOG. In the long-term, supporting routing for the old internet and the old web would be an overhead, so it could be beneficial to cut support for the diverse internet on the protocol and hardware level. Access to the old internet could be emulated on GOOG’s cloud accessed through the Trinet, much like how Windows 95 can be today emulated in your browser. ISPs would recognize the obsolescence of the internet and support the Trinet only, driven by market demand for optimal user experience from GOOG-FB-AMZN.

Perhaps a future with great user experience in AR, VR, hands-free commerce and knowledge sharing could evoke an optimistic perspective for what these tech giants are building. But 25 years of the Web has gotten us used to foundational freedoms that we take for granted. We forget how useful it has been to remain anonymous and control what we share, or how easy it was to start an internet startup with its own independent servers operating with the same rights GOOG servers have. On the Trinet, if you are permanently banned from GOOG or FB, you would have no alternative. You could even be restricted from creating a new account. As private businesses, GOOG, FB, and AMZN don’t need to guarantee you access to their networks. You do not have a legal right to an account in their servers, and as societies we aren’t demanding for these rights as vehemently as we could, to counter the strategies that tech giants are putting forward.

The web and the internet have represented freedom: efficient and unsupervised exchange of information between people of all nations. In the Trinet, we will have even more vivid exchange of information between people, but we will sacrifice freedom. Many of us will wake up to the tragedy of this tradeoff only once it is reality.

 

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59 comments

  1. Chris

    Thank you, Andre and Yves. Well researched essay and evidence that anti monopoly work needs to be done. It’s even more important than it has ever been.

    I think that NC readers can all see where this is heading. Instead of the hundreds of 000s of workers in these companies doing stuff… their own employees are working on AI right now to do the work that people used to do.

    Good luck with your revenues when we no longer have incomes

    Reply
    1. Mattski

      “Good luck with your revenues when we no longer have incomes.”

      Or–as my wife puts it–“Who’s gonna buy all these trinkets when nobody has a job?”

      Ouroboros

      One of the best pieces I have read here. Passing it to others.

      Reply
    2. WheresOurTeddy

      It is impossible to convince the ownership class in this country that they’d be better off having a smaller % of a growing pie rather than a larger % of a stagnant or shrinking pie, but they’re all scorched-earth IBGYBG parasites.

      “Well researched essay and evidence that anti monopoly work needs to be done. It’s even more important than it has ever been.” Seconded. 37 years on, still waiting for that wealth to “trickle down”…any day now…

      Reply
      1. ABasLesAristocrates

        I think they understand it just fine, but don’t care. It isn’t about how much real wealth they have: it’s about how much wealth they have relative to other people. They don’t care if they starve, as long as you starve faster.

        Reply
  2. Thuto

    This post must make painful reading for anyone who’s in the C-suite at Microsoft, a vision/scenario analysis of the future without any mention of MS, wow. This for a company that certainly had enough in its warchest to shape or even lead/co-lead the evolution from OS to web to social to mobile to AI. The brains trust in the strategy war room weren’t well matched with the resources in the budget war chest one can reasonably conclude.

    Re: “25 years of the web has gotten us used to the foundational freedoms we take for granted”. As insightful as the post is (and it is very insightful, making for sobering reading about the future of the tripartite dominance of the internet by the three giants), the author doesn’t swing the pendulum far enough in the opposite direction re: how freedom itself is a virtue that can be exercised by users of the web to stymie (somewhat) what appears to be an unstoppable march to dystopian future. As the post makes clear, much of this vision of the future is predicated on these giants collecting massive streams of data about us as individuals, but we can exercise our freedom to resist the coercive tactics designed to make us deliver said data hand over fist in the name of “enhanced user experience”.

    More to the point, while some interaction with the web/internet/mobile is unavoidable in 2017, wholesale migration of our entire lives to the internet that powers services like Google Now and Suggest, is not. Do I really want mundane, everyday decisions like what to eat to be processed on the Amazon/FB/Google cloud and served to me as a “suggestion” by an end user device (e.g. Amazon echo) from the self same giants?? With such willful participation in the demise of the web (as originally conceived) by its users in search of convenience, people like Musk can entertain fantasies of connecting the human brain to the cloud and have the press wrap such wild claims with a veneer of legitimacy (people are afterall abdicating so much of their decision making to remote servers that it seems fair to say the human brain is all but in name already connected to the cloud).

    Reply
    1. Thuto

      By the way, as I often do on the comments threats, living as I do in the developing world, i’d like to add a perspective from there. Here in South Africa, and much of the developing world, Facebook, through its Free Basics programme, is jumping into bed with unsuspecting mobile operators (I say unsuspecting because FB will soon enough muscle in on their territory through disintermediation by becoming an ISP itself, provisioning bandwidth directly from its floating satellites) to circumvent net neutrality and shape/discriminate content reaching the end user device. And the developing world is where the next 1/2/3 billion users of these services are going to come from, and where regulatory oversight will be even more important in waging this fight, but given the tendency to cheerlead rather than interrogate anything coming out of Silicon Valley, one isn’t hopeful that regulators won’t be steamrolled/bribed/co-opted or browbeaten by a compliant msm to dismantle the “bureaucratic obstacles placed in the path of innovation”.

      Reply
      1. johnnygl

        Interesting note…sounds like the goal is for fewer places to exist outside of the walled gardens, and to extend the walls to encompass the very plumbing of the internet, itself.

        One cause for optimism…AOL’s original business .odel was a giant walled garden and the web sprung up around it and everyone realized it was much nicer and abandoned AOL’s walled garden.

        Certainly things are very different now, but it is worth pointing out that the web triumphed once before.

        Reply
        1. Thuto

          Except they now have so much cash they acquire everything that even remotely looks like it could trigger a user migration from the walled garden, folding it into walled garden itself. As one user once commented here, they’re so deeply hooked into the startup financing game through their corporate venture capital arms that they know about ideas that might be the vanguard of the growth of the nice part outside the walled garden, long before these ideas hit the mainstream, and can choose to buy them or kill them long before they hit the mainstream (even when acquired they’re killed in utero through resource starvation).

          Reply
    2. Vatch

      It’s interesting about Microsoft; in hindsight, perhaps this isn’t so surprising. Microsoft’s biggest achievements were imitations of others’ creativity.

      MS-DOS (PC-DOS): They got the source code for this from Tim Paterson, and spent two months making some changes. Paterson’s operating system was a clone of the successful CP/M operating system created by Gary Kildall’s Digital Research. MS-DOS is a copy of a copy.

      Windows: They copied the Lisa and Macintosh user interfaces, as well as work done at the Xerox Palo Alto Research Center. Despite multiple examples for them to study, the early versions of Windows were shockingly crude.

      Internet Explorer: Again, Microsoft copied Netscape Navigator, which was itself based on the National Center for Supercomputing Application’s Mosaic browser. No creativity by Microsoft here, either.

      For a long time, people who wanted to include their Microsoft computers in a network had to use third party software such as Novell’s NetWare or a PC-NFS product. Eventually, such features were built into the Microsoft Windows operating system.

      How did such an unimaginative company become so dominant? Bill Gate’s mother personally knew the CEO of IBM, so when industry dominant IBM was interested in developing a line of PCs, she was able to make the proper introduction. Without IBM, Microsoft would have remained a small player.

      Reply
      1. Thuto

        Vatch, re: Microsoft. To all you said about the serendipity surrounding its dominance i’d add providing a textbook example of the tenuous link between hard work and amassing great wealth. Paul Allen amassed much of his wealth from stock price gains after 1982 when he left MS.

        Reply
        1. Vatch

          Yes, nobody becomes a billionaire purely as a result of hard work, talent, and education. It’s possible to become a millionaire that way, but not a billionaire. To become ultra rich, either blind luck or various forms of fraud or theft are a requirement.

          Reply
    3. CraaaaaaaaazyChris

      I think Microsoft probably did deserve a mention in the article for 2 reasons: first, while not a leader in cloud or AI/ML, they have stayed in the game.

      But more importantly, MS owns LinkedIn – the social graph of employment (of the 10%). This means MS has a unique look into the personnel graphs of Facebook, Google, Amazon, and the other big tech players they compete with.

      Reply
    4. ABasLesAristocrates

      Microsoft will be fine for the foreseeable future. They may not be a big player in the future of the web/”Trinet”, but if you’re a gamer you have no choice but to run Windows. As far as I know, nobody else is even taking a serious look at gaming, so Microsoft will have that moat for a while.

      Reply
  3. Disturbed Voter

    How does one make money, without revenue? How does one become the world’s richest man, without revenue? Look at the total corruption of the economy and the government, by the usual suspects. And now Bezos controls the DC media.

    Reply
  4. The Rev Kev

    Does this all mean that we are going to go back to the days when many websites had a link at the top of their pages for people that had slow bandwidth to load a more simple version of the site? John Michael Greer wrote a book recently called “Retrotopia” (http://www.resilience.org/stories/2017-06-05/retrotopia-review/) set in what is America in 2065.
    The part that I disbelieved was how in that year the elites would use a fast modern metanet while most of the plebs had to make do with something that resembled an internet from the early 1990s but I am now actually seeing this evolve right before my eyes. I think that this Trinet will end up being for the privileged as it evolves and combines and god knows what will be left for the rest of us.

    Reply
  5. Arizona Slim

    I, for one, miss the Internet that existed before the World Wide Web became so dominant.

    Remember Usenet groups? And listservs? Both were like a free university for me and many others.

    Reply
    1. visitor

      They also were the fields that Serdar Argic was roaming. Remember that one? Even the technical newsgroups I subscribed to ended up polluted by that harrowingly persistent ur-spambot spraying its automatically generated political propaganda, leaving behind endless flame-threads.

      Reply
    2. DJG

      Ahhh, listservs. I belonged to a specialized musical one, linked to a certain musical group. Eventually, we decided to have “brunch” together in Italy. And we did. Listservs somehow still promised making real (physical) connection. (Admittedly, that listserv may have had a total of 30 members, but that was what listservs were about.)

      Yet it is interesting that Naked Capitalism has gone the route of meetups. As Yves Smith mentioned, the one in Chicago was very well attended.

      How can we retain that mix of information, contact, and activism as we are being turned into commodities?

      Reply
    3. jgordon

      I agree with you completely. And just beyond bulletin boards and usenet I’d even say that the old WWW of the 90s was far superior to the mess we have today. I have to use text-only browsers, or run a complicated tangle of script-blocking and various-other blockings software in my browsers to get an experience that is half-way acceptable.

      On a related topic, people on the right are pretty much aware now that Google, Facebook, Twitter, and YouTube are cesspits of left propaganda, in addition to their various other misdeeds. I’m happy to say that in a true free market fashion these platforms are becoming less and less popular among the discerning and skeptical.

      Reply
  6. Carolinian

    An interesting article. Clearly for the general public the internet has evolved into a place dominated by giant incumbents but I’m not sure that means the original nerdy internet is going to go away or is necessarily under threat. Most of the net neutrality fears expressed recently focus on the idea that ISPs are going to gain unrestricted control of the last mile

    Internet Service Providers (ISPs) are probably soon going to dictate what traffic can or cannot arrive at people’s end devices. GOOG-FB-AMZN traffic would be the most common, due to their popularity among internet users. Because of this market demand, ISPs will likely provide cheap plans with access to GOOG-FB-AMZN, while offering more expensive plans with full internet access.

    But this has huge political implications far beyond what has happened so far and it’s not at all clear that the governed–whose consent is necessary even under dictatorships–will put up with it. For ATT or Verizon to dictate what you can see on the internet means they would also have to control public libraries and other venues committed to neutral information. These days one can find internet in practically any retail store or restaurant because the public has indeed gone mobile and the bandwidth limitations of cellphone internet encourage the use of wifi. Which is to say another way the internet has changed is ubiquitous access, all of which will have to be controlled by some dystopic future of Google/Facebook domination.

    Such an Orwellian result may come to pass but if it does we will likely have bigger problems than Facebook. Add in the fact that once restrictions are raised millions of hackers will set to work tearing down those paywalls and firewalls. Computers give power to ordinary people as well as would be social engineers and that’s why we have the internet in the first place. To this techie optimist things don’t look quite so gloomy.

    Reply
    1. nonsense factory

      I tend to agree with this view. The Internet preceded the effort to profit off the Internet. As corporate interests try to turn the Internet into something like cable TV, independent networks will flourish – there are too many people with technical skills and computer and code knowledge who just won’t accept that backwards transition.

      Reply
  7. Charles Myers

    Amazon is a back door to socialism. When you make don’t make a profit you can’t pay your workers. The more Amazon grows the more workers get paid poorly. Hence the destruction of the middle class. We have to make up the short fall with food stamps and Healthcare at the same time we are giving Amazon massive corporate welfare. The groaning I hear is the middle class rolling over.

    Reply
    1. EoH

      You may not like Amazon – the list of rational reasons for that would be legion – but it is as far from socialism as it is from Cape Town to Moscow. Amzn, FB and Giggle are about monopoly and the power that comes with it. Build it and the money will come.

      Reply
      1. Vatch

        Absolutely. There’s nothing socialistic about Amazon. As others have commented in the recent past, Amazon closely resembles Rockefeller’s Standard Oil in the late 19th and early 20th centuries. Force the competitors out of business with predatory low prices, and then own the market. Standard Oil also treated the railroads the way that Amazon treats publishers and other product wholesalers. They would force the railroads to give them special prices for transporting kerosene.

        Walmart’s behavior is similar, and there’s nothing socialistic about them, either.

        Reply
        1. Juliania

          Charles agrees with you. His term was ‘back door’, which I interpret as if one said that the Flat Iron Building horrific fire was a back door to better conditions for garment workers.

          In other words, they are reaching out towards unintended consequences, as I think the article suggests for the web giants as well.

          Reply
        2. Indrid Cold

          This may be an instructive parallel; the railroads originally had a stranglehold over national commerce that they’d built up with heavy state subsidies.
          The cable companies and telecoms think that by trashing neutrality rules they can pick winners online. They may end up taking orders from Bezos. He’s a clever man and people don’t loathe him with the same vehemence they reserve for Comcast as a faceless oppressive Borg.

          Reply
    2. some lurker

      More like feudalism, not socialism, where workers depends on the “generosity” of the local lord for their crust. OP does not claim that Amazon has no revenue, but that it doesn’t show a profit, a very different thing.

      I’m not sure his “walled garden” argument with respect to Apple holds up. Other than apps on Apple hardware (likewise Windows apps on Windows PCS) where is there a walled garden in the Apple ecosystem? Apple broke DRM on music and the hold of the carriers on cell phones and I still hear this argument that Apple is somehow a monopoly with a minority share of cell phone sales and single digits in PC sales.

      Reply
      1. jgordon

        Begging a local lord for a crust? This is the problem with the left in general–they can’t understand how overarching systems work, nor empathize with what the lord has to go through to keep things running smoothly. Instead they only see his fancy horses and castle and feel resentful that they don’t have them too.

        With regards to the lord’s crusts, should said lord freely pass them out to any vagabond that happens by without expecting anything in return? While that may be a ‘fair’ system for a couple years, in the meantime everyone stops working and when the crusts he’s saved up are gone everyone will starve. Interestingly enough that is one variety of the Bad Ending that always happens to society whenever those with low-conscientiousness and high-openness, like typical liberals, get into power.

        Reply
        1. Indrid Cold

          As often, or more so is the local lord who sends a goon squad to set fire to farms of smallholders who work hard enough to satisfy the most fervent Calvinist but have decided not to pay tribute (of 80% of their produce — for “protection”)
          I think this is the first time I’ve seen such a rationalization of the latifundia. But they said that Reagan wouldn’t get any traction. The problem with “liberals” is they rationalize the kind of whip kissery exemplified by 21st century Rothbardian libertarianism & urge people not to resist their oppressors because something might get broken.
          Brute force and ignorance trumps high minded talk about the necessity of aristocracy in its various forms every time.

          Reply
        2. knowbuddhau

          >>>”This is the problem with the left in general–they can’t understand how overarching systems work, nor empathize with the lord….”

          No, this is the kind of evidence-free BS that drags a comments section down.

          Nice straw man you got there. I take that back, it’s lousy, doesn’t resemble reality at all.

          Pity the poor lord! As he claims everything in sight, including droit du seigneur, and single-handedly “keeps everything running.” We are nothing without him. Praise the lord!

          And during the years of Redistribution (how did one guy get so much bread that his crusts alone could feed a village for years?!), instead of just standing around all day and night until we starve, like a bunch of stupid cattle with no agency of our own, with no choice but to wait for manna from the Man, maybe we come up with a better arrangement, one in which the vast majority doesn’t depend on the whims of one man for mere crusts when we grow the wheat that makes the bread in the first place. Just spitballing.

          >>>”one variety of the Bad Ending that always happens to society whenever those with low-conscientiousness and high-openness, like typical liberals, get into power.”

          Wowsers. Got any evidence? Surely something that “always happens” will be easy to document.

          And make up your mind: are you ranting against the left, or liberals?

          Reply
        3. drumlin woodchuckles

          If the Lord and all his personnel and enforcers were exterminated, the land which grows the grain to make bread with crusts on it would return to control by the peasants who grow the grain on that land to make bread with crusts on it.

          If the Lord Class demographic were exterminated, the peasants would not have to make and donate their loaves of bread to the Lord to begin with in hopes of the Lord graciously giving the peasants a crust back.

          Reply
    3. Vatch

      After thinking about this a little more, I think I see your point. Although there’s nothing remotely socialistic about Amazon, but their behavior (and Walmart’s behavior) is so bad that most of their employees and contractors can’t survive on the wages that they receive. So SNAP (formerly food stamps) and Medicaid become necessities for millions of people, and this resembles socialism. However, although huge amounts of government spending are needed to counter the predatory behavior of Amazon and Walmart, it still isn’t socialism, since most people don’t have significant ownership of the means of production. They don’t own very many shares of Amazon or Walmart, either.

      Reply
      1. Carolinian

        their behavior (and Walmart’s behavior) is so bad that most of their employees and contractors can’t survive on the wages that they receive.

        Actually the number of Walmart workers on public assistance is probably closer to 15 percent although there doesn’t appear to be any absolute number on this. In one state the percentage of assistance to Walmart workers was 14 percent. For Dollar General it was 42 percent. Walmart has raised its wages a bit since the below was written.

        http://www.politifact.com/truth-o-meter/statements/2012/dec/06/alan-grayson/alan-grayson-says-more-walmart-employees-medicaid-/

        I’d say Amazon is a much worse employer than Walmart since most of their warehouse workers serve at the pleasure of temp agencies and the work is much harder.

        Reply
        1. Vatch

          Okay, I carelessly exaggerated when I said “most of their employees” — I should have said “many” instead of “most”. But I don’t think I exaggerated by much. I suspect that some of the people who work at low wages for Walmart, Amazon, McDonalds, etc., have a second job. If they only had one job (at Walmart, Amazon, McDonalds, etc.), they would be more likely to need SNAP or Medicaid.

          Reply
          1. Carolinian

            You could probably find Macy’s workers who are on food stamps if they have large enough families and small enough bank accounts. Retail in general is low paying.

            IMO the solution to Walmart is to raise the minimum wage or lower the unemployment rate. In fact for a brief period a Walmart spokesman was favoring raising the minimum wage which makes sense as it would hurt the company’s smaller discount store competitors more than it would hurt them. I suspect rightwing ideologues inside or outside the company put the stymie on this.

            But we are off topic, eh?

            Reply
    4. JEHR

      Please explain your terms so we can understand how when employers do not make a profit then the employees aren’t well paid. Which part (if any) of that statement can be defined by “socialism”?

      Reply
  8. Tim

    This is why Nakedcapitalism.com is so in-dispensable!

    I would also recommend people to read Jonathan Taplin “Move Fast and Break Things”

    Reply
    1. Jim Haygood

      “Move Fast and Break Things”

      This adage is increasingly morphing into the darker vision proclaimed by my late buddy Ronny G one night after sharing a six pack of Bud with his German shepherd Bruno:

      I like to get drunk, drive fast and tear things up.

      Reply
  9. Dave in Austin

    This is a really important and valuable summary and the sort of thing I don’t get elsewhere. Please keep posting articles that are the equivalent of professional market research on where the on-line world is going.

    Reply
  10. Martin Finnucane

    Remember: youngsters raised under the compelling power of the GOOG-FB-AMZN triptych don’t own library cards and in at least some instances, as pointed out on this blog, mistakenly believe that lending libraries charge book rent. They have no familiarity with library call numbers or any form of cataloging, cross-referencing or searching that is not automated, heuristic, and essentially “black box” from the user perspective. Not only is their engagement with recorded ideas highly infantalized, but they have no organic experience with any other means of such engagement. The logical culmination of our consumer culture is the intense commodification of every thought and desire. The end point of our digital populism is a totalitarian dystopia.

    Or, maybe I’m just getting a head start on being an old curmudgeon. In any case, I’m sticking with the flip phone.

    Reply
  11. Alex Morfesis

    Ah…the rebirth of trintex…well…it IS still popular in mexico(hi carlos)…
    some bad ideas never die…prodigies become progenies…

    hey buddhie…can you pass over some of those figs…

    Same same…

    yes yes…hello…bill murray ??

    Hi, it’s aldo vannucci…

    no…not the singer…the movie guy

    Yes…yes…after the fox…want to talk to you about a remake…

    Reply
  12. Whoa Molly!

    Excellent article. Thanks.

    Personal notes on Goog, FB, and Amazon from an elderly tech guy…

    FB: I am very close to deleting my account. I’m seeing absolutely no use for it. Basically, my life runs better when I don’t read it. The “news” I see on FB seems close–in both usefulness and style–to graffiti on the wall of a truck stop men’s room.

    GOOG: I began using Duck Duck Go for most of my search a couple years ago as GOOG search results began turning into what appears to be paid advertisements. Still use gmail for it’s spam filtering and cloud access, but would pay for a good alternative.

    Amazon: I use it often for ebooks and shopping. The only other real options for us are a two hour drive to a real city, or a short drive to a nearby customer-hostile, junk-filled Walmart.

    Reply
    1. Arizona Slim

      I’m using Ubuntu (take that, Microsoft and Apple!) on this-here laptop. This machine has never done a Google search. Instead, I use DuckDuckGo.

      As for social media, the less time I spend on it, the better I feel. Compared to Naked Capitalism, the discourse is on a very low level. I come here to exercise my brain.

      Reply
  13. Jeremy Grimm

    This post bothers me — the problem at hand is Net Neutrality. There are already many ways to shutout NakedCapitalism and similar sites without the changes portended by the end of Net Neutrality — as clearly elaborated in this post. Left unconstrained — Jim Haygood’s “Five Horsemen of the Techpocalypse” have many ways to crush NakedCapitalism and others as do other big players in Big Media and the U.S. government.

    The move to end Net Neutrality is a move by the Internet Service Providers — like Verizon — to get a cut of the take other big players like Facebook and Google extract from the Web. This is war between giant elephants … smaller animals will get trampled. This is an episode in the Cartel Wars for what flesh and blood remains in our dying consumer economy.

    Net Neutrality MUST be protected not only in-itself but as a line-in-the-sand where we might battle the false and destructive Neoliberal arguments used to justify the destruction of Net Neutrality. With Net Neutrality gone sites like NakedCapitalism become even more vulnerable to predation. As a customer of Verizon’s phone services and Comcast Internet service — I can say from experience they do not play nice.

    Reply
  14. ABasLesAristocrates

    There are a few promising counter-trends. Google’s demonetization of every YouTube video more controversial than “I like puppies and kittens” has the content creators YouTube depends on looking for the exits. Retailers are beginning to realize that Amazon only does business with them in order to learn their secrets so it can undercut them later. Advertisers are starting to realize that Facebook advertising doesn’t perform as well as it should, nor as well as Facebook is telling them it does. Everybody hates Facebook, which is why every potential competitor (I believe Ello was the last one) gets a ton of buzz before petering out due to FB’s however-many-billions-of-users moat. I don’t know one single person who doesn’t despise Facebook, even among those who use it constantly. Can these trends make a difference in the face of these behemoths? Time will tell.

    Reply
  15. Ook

    On a practical level, I remember when Google changed their search algorithm to downgrade aggregators. This was a necessary step at the time, because too many people were creating networks of websites consisting of links to each other, the result being a lot of junk in search results. It is difficult to algorithmicly distinguish between a NC-style links page and one of these fake aggregators. Not denying that the results also benefited Google of course.

    Second, the discussions above about Microsoft are informative, because in the early 1990s, we would see articles like this one above, pointing out that MS owned 95% of the PC market and oh my, they will own all of us in the future. Not saying a break-up wouldn’t be a bad thing, but I would be willing to venture that 30 years from now, nobody will be talking much about Google, Facebook or Amazon, as the next best thing takes over.

    Reply
  16. Wade Riddick

    Google is an advertising company. Search is/was the service they provide their product/customers to grab their eyeballs. A.I. will allow them to steer the decision-making process behind those purchases more carefully. A.I. is their steerage fee.

    Presently, Google sits between you and the world, monetizing your contacts and your desire for information. Facebook monetizes your personal/social contacts. They borrowed the Hollywood TV model, essentially getting users to turn their own lives into entertainment. The viewer becomes the entertainer too. It was demonically brilliant, if alienating. The result digests our communities into a series of disjointed interest groups/consumer segments.

    Reply
  17. Wisdom Seeker

    Re: “25 years of the web has gotten us used to the foundational freedoms we take for granted”.

    Too generation-centric. Over 25 years, an entirely new generation has grown up that knows nothing of the freedoms we took for granted back in the 1990s. The “us” in the quote are now the old dinosaurs.

    But the article is persuasive that 25 years from now the internet, the ways people use computing power, and the ways they interact, will look very, very different from what we got used to over the past 25 years.

    Reply

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